DA Hike to 25.70%, Salary Boost for Bank Employees

DA Hike: Good news for bank employees. The DA hike, which will increase salaries from 25% to 25.70% in the May–July 2026 quarter, will result in a salary increase. Although the increase is only 0.70%, it impacts every pay scale because it’s linked to basic salary and increases take-home pay. In Scale I, this increase could range from Rs 435 to Rs 965 per month, which could add up to a substantial amount over time. Here’s how much the increase will be for different pay scales.

This increase may seem like only 0.70%, but it has a direct impact on employees’ salaries. DA is always determined as a percentage of basic salary, so each employee’s take-home salary increases slightly, resulting in a difference in their total income. Using the example of Scale I employees, a basic salary of Rs 48,480 yields a monthly benefit of approximately Rs 435. A salary of Rs 67,160 yields an increase of approximately Rs 601, and a salary of Rs 80,560 yields an increase of approximately Rs 719, making it clear that the increase increases with salary.

Similarly, employees with higher salaries receive even greater benefits. A basic salary of Rs 93,960 receives an increase of approximately Rs 838 and a basic salary of Rs 1,08,260 receives an increase of approximately Rs 965 per month, resulting in a significant increase in total monthly income. Changes in DA are made keeping inflation in mind, so that rising prices have less impact on employees. To this end, CPI data is periodically reviewed, and DA is increased or decreased based on this, so that employees’ actual earnings, or their purchasing power, do not decrease significantly.

Even if the increases are small, if they continue to accumulate over several quarters, they can add up to a significant increase over a year, and the difference in overall income becomes visible. Recently, the central government increased its employees’ DA from 58% to 60%, a 2% increase. In comparison, the increase for bank employees is slightly less, as the methods, timing, and standards for determining DA differ.

Recently, the government discussed the 13th bipartite wage agreement with commercial banks (PSBs). It was asked to finalize it within the next 12 months, according to the timeline. Pay revisions for employees and officers of commercial banks will be effective from November 1, 20217. Financial institutions, including public sector banks and insurance companies, revise their employees’ salaries every five years. Under this process, the Indian Banks’ Association negotiates with employee organizations and unions to arrive at a consensual wage agreement.

According to the new changes, bank employees will see a slight increase in their salaries this quarter. While modest, it will impact employees at all levels. Meanwhile, central government employees are expected to receive their dearness allowance arrears again in the second half of the year. Currently, the DA for central government employees is 60 percent. Last April, the central government cabinet approved a 2 percent DA increase for the first half of 2026.

This means that central government employees will receive 60% DA starting in January. Consequently, their salaries will include DA arrears for January, February, and March. DA increases are based on the recommendations of the Seventh Pay Commission.